This refers to a cushion against the potential loss resulting from a price decline in a security or market. The challenge associated with downside protection is that downside protection needs to be balanced with upside potential for high returns. For this reason (among other more complicated ones), some investors do not believe in downside protection.
Whether or not an investor should consider downside protection depends on several factors, such as how long before the money is needed and if there will be regular withdrawals during that time. The sooner one needs the money and the more often one plans to withdrawal, the more appealing downside protection can be. A common example of downside protection is having a put option on an owned stock.
Monday, July 7, 2008
Thursday, July 3, 2008
Ascending bottoms
This refers to a chart pattern in which the lows of the trading range get progressively higher over a given time frame. Ascending bottoms chart patterns can be used to evaluate stocks, commodities, indexes or virtually anything with a price/time chart. Ascending bottoms can be plotted for virtually any time frame: daily, weekly, monthly, yearly or even longer periods of time.
Ascending bottoms are considered an indication of a rising market and are generally viewed as a bullish pattern. Ascending bottoms are considered an especially bullish pattern when combined with ascending tops. Ascending bottoms chart patterns are most likely to be used by a chartist or by a technical analyst. The opposite of ascending bottoms would be a descending bottoms pattern.
Ascending bottoms are considered an indication of a rising market and are generally viewed as a bullish pattern. Ascending bottoms are considered an especially bullish pattern when combined with ascending tops. Ascending bottoms chart patterns are most likely to be used by a chartist or by a technical analyst. The opposite of ascending bottoms would be a descending bottoms pattern.
Tuesday, July 1, 2008
Deer Market
This refers to a flat market. Neither a bull or bear market, a deer market is characterized by low activity, with timid investors waiting for a sign of which way the market is going to end up moving.
The term is used to illustrate when investors who are unable or unwilling to move due to uncertainty - like deer who freeze when "caught in the headlights" of a vehicle.
The term is used to illustrate when investors who are unable or unwilling to move due to uncertainty - like deer who freeze when "caught in the headlights" of a vehicle.
Hammering
The rapid and concentrated sale of a stock thought to be overvalued by the market. It performed by investors and speculators who believe that prices are inflated and that a period of liquidation is imminent.
Hammering the market is achieved through large sale orders or many small sell orders. In some cases, investors may even collaborate on orders to attempt to push the share's price even lower.
Hammering the market is achieved through large sale orders or many small sell orders. In some cases, investors may even collaborate on orders to attempt to push the share's price even lower.
Subscribe to:
Posts (Atom)